Prior research suggests that young children associate fear with imaginary creatures more strongly than with realistic threats to safety. We propose an alternative: the Dual-Source Account of children-s understanding of fear. In this account, as early as the age of 3 years, children associate both realistic and imaginary causes of fear with being scared, and this understanding increases with age. In the current study, children N=48, 3-5 years labeled the emotion of a story-s protagonist who encountered either a realistic or imaginary fear-eliciting creature. Young preschoolers attributed fear to both imaginary and realistic creatures approximately half of the time, and their attribution of fear to both imaginary and realistic creatures increased steadily with age. Thus, as predicted by our account and evolutionary theorizing, the basis of children-s understanding of fear includes both realistic and imaginary causes of fear.